Steady Gold, Slight Oil Gains: Market Focus on Powell’s Remarks

Gold prices held relatively steady yesterday, despite a stronger dollar and rising U.S. Treasury yields. Market caution prevailed as the market awaited Federal Reserve Chairman Powell’s speech at the Jackson Hole symposium.

Oil prices closed slightly higher after a day of volatile trading. In the morning, concerns about demand and a stronger dollar led to a $1 per barrel drop, but prices rebounded following the release of a report indicating a decline in European diesel inventories.

Gold >>

Despite a stronger dollar and rising U.S. Treasury yields, gold prices held relatively steady yesterday. The cautious market sentiment was fueled by anticipation of Federal Reserve Chairman Powell’s speech at the Jackson Hole symposium.

Data revealed a second consecutive weekly decline in initial jobless claims in the U.S., suggesting a tight labor market despite the Fed’s aggressive rate hikes. However, the release of the jobless claims data triggered a rebound in the dollar and U.S. Treasury yields, diminishing gold’s allure.

The market awaits Powell’s speech to confirm whether rates will remain elevated for an extended period. If Powell paints a more optimistic medium-term economic outlook, gold prices could rise on signals of potential future rate cuts.

On the technical front, gold faced resistance near the $1923 mark, leading to oscillating closes under pressure. After a slight rise to around $1916 during the Asia-Europe session, prices retraced as they broke through $1922 in the afternoon. Eventually, prices stabilized around $1911 during the European-American session, before experiencing another brief rebound to $1923, closing with oscillations overnight.

Technical Analysis:

Today’s short-term strategy for gold suggests prioritizing short positions on rebounds, with taking long positions on minor pullbacks as a secondary approach.

  • Key resistance levels to watch in the short term are around 1923-1928.
  • Key support levels to watch in the short term are around 1907-1902.

WTI Crude Oil >>

In early Asian trading today, WTI crude oil hovered around $78.91 per barrel. Oil prices experienced marginal gains in a volatile trading session yesterday.

Prices initially dropped by $1 per barrel due to concerns over demand and a stronger dollar. However, they rebounded following the release of a report indicating a decline in European diesel inventories.

Ahead of Federal Reserve Chairman Powell’s speech, cautious sentiment in the market elevated the safe-haven appeal of the U.S. dollar, making oil relatively more expensive for holders of other currencies, thus curbing demand.

Yesterday, oil prices displayed a broad range of oscillation from a technical perspective. During the Asia-Europe session, prices showed a slight uptick around the $78 level.

In the afternoon, a rally was met with resistance around the $79.3 level, resulting in a retreat below the $78 level. Prices then stabilized and rebounded around the $77.5 level before closing just above $78.5 with a small gain.

Overall, prices found short-lived support around the $77.5 level before rebounding. However, upward movement remained suppressed in the $79.3-$79.5 range, displaying a pattern of oscillation under pressure.

Technical Analysis:

Today’s short-term strategy for crude oil suggests focusing primarily on long positions on minor pullbacks, with short positions on higher rebounds as a secondary approach.

  • Key resistance levels to monitor in the short term are around 80.0-80.5.
  • Key support levels to monitor in the short term are around 77.0-76.5.

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